Dirty money fears push Deutsche Bank into trans-Atlantic spotlight

European lawmakers on Monday will probe Deutsche Bank’s possible involvement with money laundering by Danske Bank — with their American counterparts watching closely as they investigate the German lender and its dealings with President Donald Trump.

The European Parliament’s committee on tax avoidance will ask at a hearing about Deutsche Bank’s role in helping the Danish entity move cash abroad. Danske Bank is under fire for funneling 200 billion euros ($229 billion) in non-resident money through its Estonian branch between 2007 and 2015. Since a Danske Bank whistleblower brought the possible scheme to light in 2018, Deutsche Bank has said it is cooperating with inquiries from regulators and law enforcement worldwide.

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Deutsche’s CEO Christian Sewing said on Friday that the bank “currently [does] not have any ... indications of wrongdoing” in the case and was providing “full cooperation with authorities when it comes to Danske Bank.”

EU lawmakers will ask Stephan Wilken, Deutsche Bank’s group anti-money laundering officer, for starters, why the German-based powerhouse is mentioned in connection with so many money-laundering scandals, including the Panama Papers case. MEPs want to know what the bank’s own investigations have found, if Deutsche Bank employees are under criminal investigation — anywhere — and what it’s doing to monitor and prevent money laundering.

Before the hearing, lawmakers provided some of the questions they hope to get answers to. In some cases, the tone is notably testy or tinged with disbelief. For example, if Deutsche Bank executed U.S. dollar clearing on behalf of the Estonian branch of Danske Bank, it would have required information about the account holders. The Federal Reserve is reportedly investigating the way Deutsche Bank’s U.S. operations handled funds from Danske.

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“Why did Deutsche Bank declare that it was not informed about the account holders although it provided clearing services on behalf of the Estonian branch of Danske Bank for which information about account holders are needed?” Green Party MEPs plan to ask.

In the U.S., the investigations are multi-pronged and to some extent bipartisan, with both Democrats and Republicans interested in what their counterparts in Europe unearth.

Democrats, who just took control of the House Financial Services and Intelligence Committees, are pursuing a joint investigation largely motivated by the bank’s loans to the Trump Organization and what kind of influence foreign powers might have on the president. Deutsche Bank refused to give then-candidate Donald Trump a loan during his 2016 presidential campaign, The New York Times reported on Saturday.

The committees have subpoena power that could leave Deutsche Bank little recourse but to hand over records.

Financial Services Chairwoman Maxine Waters (D-Calif.), who has called for the president’s impeachment, has vowed to use her new investigative power to follow the “Trump money trail,” starting with Deutsche Bank. She is working with Intelligence Committee Chairman Adam Schiff (D-Calif.), who is leading an effort to investigate Russia’s role in the presidential election. Schiff has said Deutsche Bank is "one obvious place to start" as he looks into possible money laundering by the Trump Organization.

“We’re doing as much as we can together,” Schiff said in an interview.

In the Senate, Sen. Chris Van Hollen has led a push to persuade the Republican-led Senate Banking Committee to hold a hearing on Deutsche’s possible role in money-laundering schemes.

In an interview, the Maryland Democrat said the subject has come up in conversations he has had with European officials.

Van Hollen is following the EU Deutsche Bank inquiry “very closely,” and he said the bank’s activities in Europe “may provide important lessons for what’s happening here in the United States."

Rep. Gregory Meeks (D-N.Y.), who is leading the House subcommittee with jurisdiction over the Federal Reserve and other bank regulators, said it was important for U.S. and European officials to talk to one another about the bank’s activities.

“It’s bigger than just Trump,” Meeks said. “This has an effect on us and every other country.”

Despite the clear motivation by Democrats to investigate Trump, Republican lawmakers are getting behind the effort to probe Deutsche Bank.

Rep. Patrick McHenry (R-N.C.), the top Republican on the House Financial Services Committee, has asked Sewing for details on the lender's anti-money-laundering practices.

“With Deutsche Bank, there’s legitimate investigative work this committee has to focus on to ensure they’re complying with long-standing law in the United States,” he said in an interview. Money laundering for Russians "is a major concern we have as policymakers that’s bipartisan."

Rep. Andy Barr (R-Ky.), who will be the top Republican on the financial services investigations subcommittee, said the EU probe was relevant to U.S. interests.

“We ought to pay attention to what the EU is looking into with them,” Barr said. “Especially to the extent the activities they’re scrutinizing would impact the global economy or the U.S economy.”

The European Commission has proposed legislation that would strengthen the European Banking Authority’s anti-money-laundering team and give it the power to intervene when it finds national regulators aren’t up to the task.

It wouldn’t have the power to prosecute customers who turn out to be criminals, however.